Tuesday August 21, 2012
Concocting the right formula
By JAROD LIM
email@example.com Photos by AHMAD IZZRAFIQ
MANY might have given up after months of sleepless nights just trying to come up with the perfect formulation for a highly technical product, but not Eddy Choong.
It took Choong and his wife around two years to come out with the right formula for high-quality grease.
“It was a endless series of tiring trial-and-error attempts to mix the correct compounds for the grease. Back then, our house was filled with small containers from unsuccessful experiments,” he said.
“Our perseverance finally paid off when we finally managed to come up with the correct composition for the grease one night,” he said.
With a successful formula in hand, Choong pumped in RM1mil to establish Toyo Grease Manufacturing (M) Sdn Bhd in Sungai Buloh in 1998. He says it is the first and only dedicated grease production company in Malaysia.
These days, he has every reason to be proud of being a pioneer in the industry. But his success only came after much perseverance and hard work.
After having studied electronic engineering, Choong initially started an electronic equipment repair business in 1979 before venturing into car repairs and modification as well as taking over a Taiwanese cable manufacturing company in Malaysia.
He sold off his shares in the cable company in1996 and began looking into grease production.
It all started when he found out from the Malaysian Investment Development Authority that Malaysia does not have a grease production factory. He was instantly interested when a friend told him of a grease production factory in Taiwan that had failed after having been in business for five years.
According to Choong, he paid the deposit for the Taiwanese factory and had it dismantled within a week and set up back in Sungai Buloh. After much reconfiguration of the machinery and kettles used to process the grease as well as going through the painstaking effort to devise the right formula, the company grew slowly and eventually established itself in the premium-grease market. Considered a fairly new business in Malaysia back then, Choong said it was initially difficult to gain the confidence of local customers.
“Malaysians always have the mindset that imported products are much better than local goods,” he said.
“I managed to get a contact who was operating a steel plant in Indonesia and he expressed interest in our products. He bought a container of grease from us and gave very good feedback after using it. Our business started to bloom after that. In 2006, we achieved profitability on the back of RM3.5mil in revenue,” he said.
The company then built another factory on a two-acre site in Semenyih and moved there in 2011.
The sole player
Despite being the first and only grease producer in the country, Choong said that business was not as simple as he had first expected.
“Producing a premium-quality grease needs a combination of a precise formula, highly specific skill sets and years of experience. If the ingredients are mixed incorrectly, the whole production run is ruined,” he said.
“However, it is still a unique and growing business. In 2003, Toyo became the first in Malaysia to acquire a licence from the National Lubricant Grease Institute of the United States,” he said.
NLGI is an international technical trade association that promotes research and testing for the development of improved lubricating greases as well as exploring better lubrication engineering and methodology. According to NLGI, total lubricating greases production worldwide reached around 1.08 million tonnes last year.
Choong said that local consumption of grease and lubricants averages 20,000 tonnes a year.
Presently, the company produces 150 to 200 tonnes of grease and lubricants each month to cater for local use as well as the overseas market.
“We are producing more than 200 types of greases and lubricants with prices ranging from RM6 to RM2,000 a kilogramme. The most expensive ones are the polytetrafluoroethylene (PTFE) greases used for paper-mill machinery.
“We are currently exporting 30% of our overall production to Indonesia, Singapore, China, Hong Kong and the US. We also export our gas valve lubricants to Russia for use in oil refineries,” he said, adding that the company is one of the three gas valve lubricant production companies in the world.
Choong says the company has also invented the first spray-on grease of its own formulation in the world.
“This spray grease helps a lot, especially in reaching narrow openings and tiny spaces in machinery,” he said, adding that the company produces 8,000 cans of the grease a day.”
Another of the company’s accomplishments is being the first in Malaysia to have its food grease certified halal by the Malaysian Department of Islamic Development (Jakim) in 2001.
“Some types of grease are produced using animal fats. However, we replaced those ingredients with palm oil so that they can be used in most food-processing machines,” he said.
“Our food grease is categorised by the National Sanitation Foundation in the US as NSF H1-grade food grease, which means it can be sold to all of the world,” he said.
Choong said that the difference between low-end grease and premium grease lies on the ingredients used. Low-end grease is usually made from 50% recycled oil and 50% new oil, making the end product more toxic and less refined.
Premium grease is usually made of synthetic and mineral-based oil mixed with high-quality additives that enhance the existing properties of oil as well as imparting new properties to the grease such as rust inhibitors and extreme pressure tolerance.
Premium-quality greases are able to withstand both higher and lower operating temperatures depending on their properties.
The company presently produces grease for steel plants, water treatment plants, paper recycling plants as well as engine oil for high-performance cars such as Ferraris and Lamborghinis.
Choong is predicting a good year ahead as the company is making its way into the Australian market.
“A trailer manufacturer in Australia expressed an interest in our products. I expect to export one container (16 tonnes) of grease products to this customer,” he said, adding that he hopes sales will increase exponentially.
He is also targeting a 43% increase in revenue from last year, hoping to rake in more than RM10mil in sales this year.
Choong is looking forward to entering the Philippines market as well as finding the right people to handle expansion into China.
“The business is definitely expanding and I hope that next year’s revenue will reach around RM20mil to RM30mil,” he said.
Choong also plans to start the first DIY-car repair franchise workshop next year to educate car owners on the proper way to use lubricants and engine oil as well as to service their cars.
“We have already started to build the 20,000 sq ft workshop beside the factory.
“The workshop will also provide customers a standard pricing guide for car equipment to prevent them from being taken advanted of,” he said.
“We will also expand a few more workshops with repair bays so that customers can get hands-on experience in servicing their cars and know the right way to do it,” he said.